In
Project Syndicate Wednesday, he writes that he thinks he
knows where oil is going, despite thinking that trying to
forecast the price of oil is a fool's errand.

I used to joke that the most important thing I learned from my
research was never to attempt to forecast the price of oil. As
2014 comes to a close, the price of oil has just crossed the $100
threshold again – this time headed down. One of the big questions
for 2015 is whether the decline will continue. Despite my earlier
cynicism, I think I know the answer.

Turns out he thinks oil will be higher at the end of the year
than it is now, though it will continue to fall in the short
term.

His indicator? The spread between the five-year forward price and
the spot price of crude.

According to the CME, the futures market is pricing Brent oil
for January 2020 at $75.03. Meanwhile, the spot or current price
has been all over the place, crashing to as low as $49.66 on
Wednesday.

"I suspect that the five-year forward price
is much less influenced by speculation in the oil market than the
spot price, and more representative of true commercial needs. So
when the five-year price starts moving in a different direction
than the spot price, I take notice."